UK banks issue payment ban for people on Universal Credit and State Pension

manchestereveningnews.co.uk:

Brits on Universal Credit and State Pension have been warned about payment bans brought in by some banks. Half of lenders are refusing to give people on benefits a mortgage, because they won't allow them to use money from their Universal Credit or State Pension pots.

This means they face limited choice and can make it harder to get on the housing ladder. The issue is that for borrowers to get a mortgage, lenders look at all their sources of income to see if they can afford the loan.

That includes salary, but also things like benefits and pension payments. READ MORE: Aldi follows Tesco and opens supermarket where shoppers can't pay with cash or card Many only take some sorts of income into account and not others, which can come as a huge shock.

Lenders also do not agree on what they count as proper income and what they don't, which trips many people up. David Hollingworth, from L&C Mortgages, said: "I think people can be under the misapprehension that lenders will take their whole income into account. "They total everything up and expect their lender will accept everything. "But each type of income can be treated differently, and it can be treated differently by each lender.